The United Kingdom’s antitrust watchdog has blocked Facebook’s acquisition of Giphy and ordered the social network to sell off the GIF-sharing platform.
The Competition and Markets Authority said Tuesday that the deal would let Facebook, which has been renamed Meta, “increase its already significant market power” by denying or limiting other platforms’ access to Giphy GIFs and driving traffic to Facebook-owned sites.
It’s reportedly the first time the watchdog has sought to unwind a tech deal.
Facebook announced in May 2020 that it bought the GIF platform to integrate into Instagram. It’s rumored they paid $400 million for the popular gif sharing platform.
The CMA eyeballed the acquisition and it opened an investigation into the deal in June 2020. The argument concluded it would prevent rivals from accessing Giphy’s content.
After consulting with other businesses and groups and assessing alternative solutions proposed by Facebook, the watchdog said it “concluded that its competition concerns can only be addressed by Facebook selling Giphy in its entirety to an approved buyer.”
Giphy’s library of short looping videos, or GIFs, are a popular tool for internet users sending messages or posting on social media. The two sides have waged a bitter battle over the deal.